Research by the British Property Federation (BPF) shows there are now a total of 157,512 Build to Rent homes complete, under construction and in planning across the UK – a 12% rise since Q1 2019.
Research produced by Savills and commissioned by the BPF revealed that between Q1 2019 and Q1 2020, the number of completed Build to Rent homes increased by 42%, those under construction decreased by 11 per cent and those in planning jumped by 12 per cent.
There were significantly higher volumes of Build to Rent homes moving from under construction to complete. Growth in the number of homes under construction in London has been relatively static, with a 2% rise. However, London has seen a decrease in the number of homes in planning, falling by 10% since the end of Q1 2019.
“One concern is the London pipeline – the statistics show a sharp decline in the number of homes in planning across the capital. London was a leader in championing Build to Rent and the sector’s role in adding much-needed new homes to its housing market.
“The imbalance between housing demand and supply has not gone away, and if anything the impact of coronavirus has shown us that a safe and secure home for everyone is fundamental, and we should be doing everything we can to ensure the capital’s housing market delivers for everyone.”Ian Fletcher, Director of Real Estate Policy, British Property Federation
In the regions
Outside of London, the sector continues to see a significant rise in the number of homes completed – rising 58% in the last 12 months, but those under construction have decreased by 21%. However, with a robust pipeline of new Build to Rent homes in planning – which rose by 41% in the past year – the number of homes under construction should rise again.
Types of organisations building new homes
Professional investment firms typically finance Build to Rent schemes and manage the development for the long-term. The BPF research also revealed the types of organisation building the new homes:
- 28% are local developers
- 27% are UK housebuilders
- 17% are major UK developers
- 14% are contractors
- 9% are registered providers
- 3% are major international developers
“We’d expect high levels of uncertainty to increase demand for rented accommodation as people look to avoid longer term commitments such as mortgages, or if borrowing remains more constrained. At the same time, we expect to see the leveraged buy-to-let sector to remain under pressure, driving demand into Build to Rent.
“This means that once lockdown is lifted, Build to Rent developers should be confident to progress stalled developments. Also, housebuilders will face particular pressure to restore their sales rates when restrictions on doing business are lifted, so we could see a greater role for Build to Rent to absorb stock. Housebuilders now account for 27% of total Build to Rent pipeline compared to just 10% just three years ago. We could see this share increase significantly over the coming months.”Jacqui Daly, Director, Savills residential research
Feature image credit: Canary Wharf Group